Thank you for considering the Path2College 529 Plan.
It’s never too early to prepare your child or grandchild for a successful future. No matter what their age — with the rising cost of tuition — the time to start is now.
The Path2College 529 Plan is a state-sponsored, tax-advantaged 529 college savings plan that’s helping families and individuals plan for the cost of education. It’s available to any citizen or tax payer. And just about anyone can help contribute including Grandparents, other family members and friends.
It only takes about 15 minutes to open an account online and it is easy to manage. There are a variety of low-cost investment portfolios to choose from including enrollment year investment portfolios, static and principal plus interest options.
A 529 college savings plan can help you save more of your money over time. Any earnings grow free from federal tax, and many states offer a state income tax deduction or tax credit for contributions. Limitations apply. See the Plan Description for details. As a 529 Plan, the Path2College 529 Plan also offers certain gift and estate tax planning benefits; consult your tax advisor. And withdrawals are tax-free at both the federal and state level when used for qualified education expenses.
You can use the funds for a lot more than just tuition — including required fees, certain room and board costs, books, supplies, as well as computers and related technology costs such as Internet access fees and printers. Additional equipment required for attendance may also qualify. Funds can be used at most accredited colleges and universities in the United States — even certain colleges abroad. In addition, up to $10,000 annually can be used toward K-12 school tuition per student from all 529 plans; expenses for fees, books, supplies, and equipment required for the participation of a designated beneficiary in an apprenticeship program registered and certified with the Secretary of Labor under the National Apprenticeship Act; and up to $10,000 repaid (including principal and interest) on any qualified education loan of either a 529 plan designated beneficiary or a sibling of the designated beneficiary. To be a qualified expense, the loan repayment amount for an individual is subject to a lifetime limit of $10,000.*
If you’re worried about having the account in one state and attending school in another, don’t be. With most plans, your school choice is not affected by the state of your savings plan. You can be a resident of Georgia and send your student to college in North Carolina.
This section provides a summary of information about the Path2College 529 Plan, but it’s important you read the full Plan Description for more detailed information.
*State tax treatment of withdrawals for K-12 tuition expense, apprenticeship program expenses, and the repayment of student loans is determined by the state where you file state income tax. If you are not a Georgia taxpayer, please consult with a tax advisor.
The Path2College 529 Plan was created by the State of Georgia as a tax-advantaged way to help people save for the cost of higher education.
To contact the plan:
Monday - Friday
8:00AM to 8:00PM ET
PO Box 219293
Kansas City, MO 64121-9293
920 Main Street, Suite 900
Kansas City, MO 64105-2017
Plan Management
The Path2College 529 Plan is administrated by the State of Georgia, acting by and through the Board of Directors of the Georgia Higher Education Savings Plan.
The Direct Plan Manager is TIAA-CREF Tuition Financing Incorporated, or TFI. TFI is a wholly owned subsidiary of Teachers Insurance and Annuity Association of America (“TIAA”). TIAA, together with its companion organization, the College Retirement Equities Fund (“CREF”), forms one of America’s leading financial services organizations and one of the world’s largest pension systems, based on assets under management.
A financial services company with nearly 100 years’ experience, TIAA specializes in helping clients like you reach your financial goals — for retirement, saving for college, or providing protection for your loved ones. It’s how we meet our commitment to helping you make financial well-being possible.
TFI and the Board of Directors of the Georgia Higher Education Savings Plan entered into an agreement under which TFI provides certain services, including investment recommendations, recordkeeping, reporting and marketing.
If you’re a U.S. citizen or resident alien with a valid Social Security Number or Taxpayer ID Number, and you’re least 18 years of age, you’re eligible to open an account. Individuals opening an account may also designate a person to be the Contingent Account Owner in the event of their death.
Additionally, certain types of entities with a valid Taxpayer ID Number such as a trust, an estate, or a corporation may also open an account*.
*Additional restrictions may apply, please refer to the Plan Description for details
The beneficiary is the future student. The beneficiary can be anyone with a valid Social Security Number or Taxpayer ID Number. Typically this would be your child, your grandchild, or yourself. You do not need to be related to the beneficiary, but there may only be one beneficiary per account. The only exceptions to this are entities establishing this as a general scholarship account.
Minimum Contributions & Maximum Account Balance
You can open an account with as little as $25 dollars per investment portfolio, or $15 dollars per pay period through payroll deduction.
Your maximum account balance per beneficiary for the Path2College 529 Plan is $235,000. Any contribution beyond this amount would be returned to you. In the event your account reaches this amount, it may continue to accrue earnings/interest, though further contributions would be returned and not applied.
How to Make Contributions
One of the best aspects of the Path2College 529 college savings plan is that it’s easy to make contributions. There are many ways to add to the fund including:
- A one-time electronic funds transfer
- Recurring automatic fund transfer from a checking or savings account
- Automatic payroll contributions
- Rollover from another state’s 529 plan*
- Proceeds from a Coverdell Education Savings Account*
- Personal check, bank draft, cashier or teller’s check mailed to:
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Path2College 529 Plan PO Box 219293 Kansas City, MO 64121-9293 |
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Path2College 529 Plan 1001 E 101st Terrace, Suite 200 Kansas City, MO 64131 |
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| The Path2College 529 Plan cannot accept cash contributions, starter checks, traveler’s checks, credit cards, convenience checks and some other forms of payment. | ||||
| STANDARD DELIVERY |
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Path2College 529 Plan |
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| OVERNIGHT DELIVERY ONLY |
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Path2College 529 Plan |
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| The Path2College 529 Plan cannot accept cash contributions, starter checks, traveler’s checks, credit cards, convenience checks and some other forms of payment. |
Automatic Dollar Cost Averaging
Automatic Dollar Cost Averaging is an optional feature offered by the Path2College 529 Plan, and allows you to regularly transfer funds from one or more investment portfolios to one or more different investment portfolios. You may choose this option when making a one-time new contribution, or with funds already invested in your account. Similar to the Recurring Contribution Plan, you make recurring contributions to an investment portfolio over time, but instead of making regular transfers from a bank account, Automatic Dollar Cost Averaging allows you to make transfers from a Path2College 529 Plan investment portfolio (e.g., from Principal Plus Interest Portfolio to an Enrollment Year Investment Portfolio, vice versa, or any other combination of “Source Investment Portfolio” and “Recipient Investment Portfolio”). You choose the amount you would like to transfer either on a monthly, quarterly, semi-annual or annual basis. If you elect the Automatic Dollar Cost Averaging option at the time your Path2College 529 Plan account is opened, it will be considered the initial investment allocation for your account. If you elect, change or terminate the Automatic Dollar Cost Averaging option for your existing Path2College 529 Plan account, it will be considered a change in investment strategy for previously contributed funds which you are allowed to change twice per calendar year.
*Be sure to consult with a qualified advisor regarding the possible legal and tax consequences associated with such changes.
Only the account owner may make a withdrawal. You can request a withdrawal by mail, by phone, or from the plan’s website. Withdrawals may be made individually or systematically. You can pay the institution, send it directly to the beneficiary, or reimburse yourself. Be sure to keep all receipts to substantiate qualification.
Type of Withdrawals:
- Qualified Withdrawals
These are untaxed and include any withdrawals that will be used to cover Qualified Higher Education Expenses for the student at an Eligible Educational Institution. The student must be enrolled for at least half-time for room and board expenses.Qualified Higher Education Expenses also include tuition in connection with enrollment or attendance at a K-12 public, private or religious school, up to a maximum of $10,000 per year per Beneficiary from all Section 529 plans; expenses for fees, books, supplies, and equipment required for the participation of a designated beneficiary in an apprenticeship program registered and certified with the Secretary of Labor under the National Apprenticeship Act; and up to $10,000 repaid (including principal and interest) on any qualified education loan of either a 529 plan designated beneficiary or a sibling of the designated beneficiary. To be a qualified expense, the loan repayment amount for an individual is subject to a lifetime limit of $10,000.*
- Taxable Withdrawals
The earnings portion of this type of withdrawal is subject to federal and state tax but does not include the additional federal 10% tax. Say your child receives a full or partial scholarship or attends a military academy, you can withdraw certain amounts from your 529 account that will not be used for qualified higher education expenses and those amounts will be subject to tax on the earnings portion of the withdrawal, but will not be subject to the additional federal 10% tax. - Non-Qualified Withdrawals
The earnings portion of this type of withdrawal will be subject to tax, including the additional 10% federal tax. Examples might include using the money for a car, vacation or home improvement. But even if you urgently need to pay a medical bill and withdraw money from your 529 plan as a last resort — that withdrawal would still be subject to tax, including the additional 10% federal tax.
In the event of a refund of amounts paid for qualified higher education expenses from an eligible educational institution, the refund may be redeposited to the 529 plan within 60 days without the amount being subject to tax. The recontributed amount cannot exceed the amount of the refund.
*State tax treatment of withdrawals for K-12 tuition expense, apprenticeship program expenses, and the repayment of student loans is determined by the state where you file state income tax. If you are not a Georgia taxpayer, please consult with a tax advisor.
Qualified Education Expenses may include tuition, certain room and board expenses in addition to any fees, books, supplies and equipment required for enrollment and attendance at an eligible educational institution, which includes most post-secondary institutions. Computers and related technology such as internet access fees, software or printers used primarily by the designated beneficiary when enrolled at an eligible educational institution are also qualified education expenses.
If the beneficiary is a special needs student, any additional costs required for enrollment or attendance to meet those needs will also be treated as a qualified higher education expense.
Qualified Higher Education Expenses also include tuition in connection with enrollment or attendance at a K-12 public, private or religious school, up to a maximum of $10,000 per year per Beneficiary from all Section 529 plans; expenses for fees, books, supplies, and equipment required for the participation of a designated beneficiary in an apprenticeship program registered and certified with the Secretary of Labor under the National Apprenticeship Act; and up to $10,000 repaid (including principal and interest) on any qualified education loan of either a 529 plan designated beneficiary or a sibling of the designated beneficiary. To be a qualified expense, the loan repayment amount for an individual is subject to a lifetime limit of $10,000.*
*State tax treatment of withdrawals for K-12 tuition expense, apprenticeship program expenses, and the repayment of student loans is determined by the state where you file state income tax. If you are not a Georgia taxpayer, please consult with a tax advisor.
About Room and Board Expenses
Room & board costs are considered qualified only during the academic period in which the student is enrolled or accepted for enrollment in a program that leads to a recognized educational credential from an eligible educational institution. This amount cannot exceed the institution’s ‘cost of attendance’ allowance.
Funds can be used at most accredited colleges and universities in the United States — even certain colleges abroad.
See the Plan Description (PDF) for more information.
Visit Ed.gov to find out if your post-secondary school is accredited.
Visit DOLETA.gov to find out if your apprenticeship is registered.
The Path2College 529 Plan provides a variety of professionally managed investment options to choose from including enrollment year investment portfolios that automatically shifts from aggressive to conservative investments as your child approaches their expected year of enrollment in school. Alternatively you can tailor your investment portfolios with static and principal plus interest options to match your risk tolerance, timeline, and investment preferences.
When you pay fewer taxes, you can earn more and grow your account faster — giving your child or grandchild an even bigger head start.
See the difference these tax advantages can make over time in the table below.
This example assumes an initial investment of $5,000, monthly contributions of $100, and a 6% annual rate of return over 18 years. The taxable account assumes a 28% federal and 5% state tax rate. The illustration is for illustrative purposes only and does not represent the performance of any specific portfolio.
Federal Income Tax Benefits
As a 529 Plan, the Path2College 529 Plan offers unsurpassed income tax benefits. Although contributions are not deductible on your federal tax return, any investment earnings can grow tax-deferred, and distributions to pay for the beneficiary’s qualified education expenses come out federally tax-free.
State Income Tax Information
In addition to federal tax benefits, there are state tax benefits as well. For the Path2College 529 Plan, tax treatment is as follows:
Contributions are deductible up to $8,000 per year per Beneficiary for joint filers, and $4,000 per year per Beneficiary for all others. Incoming rollovers from other 529 plans do not qualify as contributions eligible for the state income tax deduction. Georgia tax benefits related to the Path2College 529 Plan are available only to Georgia taxpayers. Qualified Withdrawals are not subject to Georgia income tax.
Non-Qualified Withdrawals and an outgoing rollover to another state’s 529 plan are subject to Georgia income tax if the contribution portion was previously deducted for Georgia income tax purposes.
You should talk to a qualified advisor about how Georgia tax provisions affect your circumstances.
Estate Tax Planning Benefits
There’s another tax advantage unique to the 529 plan. There’s no federal gift tax on contributions up to $17,000 per year for single filers and $34,000 for married filers. There’s even an option to gift amounts up to $85,000 for single filers and up to $170,000 for married filers if pro-rated over 5 years. This means you could make a one-time gift equivalent to the 5 year amount and it could all qualify for the federal gift tax exclusion. Consult your tax advisor.
It’s a good idea to periodically re-evaluate your investment strategy as your goals, investment horizon, and personal situation change — for example annually at tax time, on a yearly basis if your income changes, or upon the birth of another child.
There are no application fees, no cancellation fees, no change in beneficiary fees — only program management and underlying mutual fund fees.
As with any investment, there are risks. To help you manage these risks there are flexible investment portfolios ranging from conservative to aggressive. Assets in an account are not guaranteed or insured. The value of your account may decrease and you could lose money, including amounts contributed.
For more information about the risks involved in investing in a particular investment portfolio, and whether or not an option is appropriate for you, read the Plan Description (PDF).
It’s possible you might want or need to make changes to your account. Here's a quick summary of the types of changes you can make and what happens when you do:
Changing the Beneficiary
After you open an account you can change the beneficiary of the account to an eligible family member of the former beneficiary without adverse federal tax consequence. “Family member” includes not just immediate family but grandparents, aunts and uncles, step children, in laws...even first cousins. Otherwise, changes may be subject to federal income tax as well as other state and federal tax consequences. See the Plan Description (PDF) for more information.
Changing Investment Strategy
Anytime you make a new contribution, you may select a different investment for that amount. However, you may only change the previously contributed amount twice per year or when you change a beneficiary, and only then if it’s a member of the previous beneficiary’s family. If you have more than one account for the same beneficiary, this restriction applies to all accounts, so you’ll need to make all changes on the same calendar day. You make these changes by submitting the proper asset allocation instructions.
Adding or Changing a Contingent Account Owner
You can add or change a contingent account owner at any time by completing the appropriate form.*
Transferring Account Ownership
You may also transfer the ownership of your account to another individual or entity that is eligible to be an account owner. This is not the same as changing a contingent account owner. This would be when you want to irrevocably sign away all rights, title and interest in the account.*
*Be sure to consult with a qualified advisor regarding the possible legal and tax consequences associated with such changes.
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